Southwest passengers to lose out if they don't show up

The airline said Thursday it would launch a new "no show'' policy - in which some fliers will forfeit their fares if they fail to show up for a flight - next month, so it's not stuck taking off with empty seats at the last minute.

Passengers who've booked the cheapest Wanna Get Away or DING fares on or after May 10, 2013, for trips on or after Sept. 13, will forfeit their fare If they simply don't show up at the airport rather than canceling or re-booking the flight. The rest of their itinerary will also be canceled.

"It's not a fee,'' Gary Kelly, Southwest's CEO said. "All we need our customers to do is simply cancel their reservation, which puts us in the position of finding a replacement customer for that seat.''

Southwest is the last remaining big U.S. carrier that doesn't charge customers for changing their flight plans. News of when the no-show policy will kick in comes after United and US Airways raised their fees for changing non-refundable tickets by $50 to $200 in recent days.

Southwest, which carries more domestic passengers than other U.S. airlines, detailed the news as it reported earnings for the first quarter of the year..

It said it had net income of $59 million for the first three months of the year, a drop from the $98 million it brought in during that period in 2012. Still, the carrier saw record operating revenue at the start of the year of $4.1 billion, a 2.3% increase over the first quarter of 2012.

United Airlines, meanwhile, said Thursday that it had a loss of $417 million in the first three months of 2013.

That worked out to $1.26 per share, and was a consecutive quarterly loss for United, the nation's largest airline. United's performance stood in stark contrast to other major carriers, which earned a profit at the start of the year despite the first quarter traditionally being a slow time for the airline industry.

"None of us is happy with our first quarter financial results,''Jeff Smisek, United's CEO said in a call with investors and the media. "We still have much work ahead of us . . . but we're confident we're on the right path.''

Southwest, which is merging with fellow low-cost carrier AirTran, has been the most consistent in the industry when it comes to making a profit.

Southwest continues to differ from most of its bigger network peers by not charging for the first two checked bags or to change a reservation. But Southwest is no longer the cheapest airline to fly, and it's also starting to mirror its larger competitors by charging some extra fees for extra perks.

In January, for instance, the airline said it would begin allowing passengers to pay $40 to be part of group "A'' which boards the plane first, an important spot since Southwest doesn't assign seats. Previously, fliers could be in the first group by purchasing a special business-class ticket or being part of the loyalty program.

United struggled last year as it melded operations with its merger partner, Continental Airlines. There were problems in the spring when it switched to Continental's reservations system, causing long wait times for customers, and the snafus apparently turned off some fliers.

"I think they are still incurring merger costs and to some extent paying the price for last year's operational glitches,'' says Kevin Schorr, vice-president of Campbell-Hill Aviation Group.

United is also the only U.S. carrier to fly Boeing's 787 Dreamliner, with six in its fleet. When the fuel-saving jet was grounded in January because of concerns about its battery system, the carrier says it took a roughly $11 million hit in the first quarter.

But Boeing has come up with a battery fix, approved last week by the Federal Aviation Administration, that it is currently applying to the planes. And United has put the Dreamliner back on its roster, scheduling a 787 flight from Houston to Denver on May 31, a route from Denver to Tokyo on June 10, and flights between Los Angeles and Tokyo, Los Angeles and Shanghai, and Houston and Lagos set for early August.

The world's biggest airline in scheduled passenger miles flown also boasted about its record of getting flights to their destinations on time at the start of the year, with 81% of domestic and international mainline flights arriving within 14 minutes of the scheduled time. And United officials said they are investing in customer service training, new technology and upgraded perks to improve the flying experience, such as featuring more lie-flat seats in premium cabins than any other U.S. carrier.

In addition to boosting fees, United is seeking to raise fares.On Wednesday, United raised one-way domestic fares $3 in medium-haul and $5 in long-haul markets.

Jamie Baker, an analyst with J.P. Morgan said in an investor's note that it was the 7th attempt at a broad based fare hike this year, only two of which have stuck.